Gill, Maddie, Nanfei, Rob & Tina

Introduction

Company Overview

Sustainability

Creating Sustainable Value

Natural-based view of the firm

Sustainable Value

Conclusion

Overview

Do Whole Foods Market Embed Sustainability?

Whole Foods Value Matters

Whole foods: An Organic HistoryThe early age:1978- twenty-five year old dropout John Mackey and twenty-one year old Rene Lawson Hardy, opened the small natural foods store.

1980- John and Rene partnered with Craig Weller and Mark Skiles to merge SaferWay with their Clarksville Natural Grocery.

Expansion:

1984- Whole Foods Market began its expansion.1989- We expanded to the West Coast.1990-1999- acquiring other natural foods chains throughout the 90's.1998- Development of "virtual" store began.2000- Additional acquisitions.2001- Whole Foods moved into Manhattan.2002- Saw an expansion into Canada2003-2004- Whole Foods Market entered the United Kingdom.2007- Merger with Whole Foods Market

(Whole foods Market,2007)

Conscious Capitalism

(Conscious Capitalism, 2015)

Whole Foods Core Values

Promoting the health of our stakeholders through healthy eating education

Selling the highest quality natural and organic products available

Satisfying and delighting our customers

Supporting team member happiness and excellenceCreating wealth through

profits & growth

Caring about our communities & our environment

Creating ongoing win-win partnerships with our suppliers

Definition of sustainability

Sustainable Development

Meeting the needs of the present generation without compromising the ability of future generations to meet their own needs.

(Brundtland Commission, 1987)

The Brundtland Report recommends that the international community should meet to discuss the growing environmental issues, and to examine how best to reduce the effects of human activity on the environment for future generations that is in line with their newly developed concept of sustainable development.

(The Brundtland Report, 1987)

Triple Bottom Line

Financial performance: improve profits and share dividends to shareholders.

Social performance : the responsibility of other social stakeholders.

Environmental performance: the measure of environmental protection.

(Merriman and Sen, 2012)

(Elkington, 1998)

The Importance of Embedded Sustainability

Embedded Sustainability is the incorporation of environmental, health, and social value into the core business with no trade-off in price or quality.

(Laszlo and Zhexembayeva, 2011)

Resourced Base Perspective

Environmental Perspective

Bolt-on sustainability Embedded sustainability

Goal Pursue shareholder value Pursue sustainable value

Scope Add symbolic wins at the margins

Transform core business activities

Customer Offer “green” and “socially responsible” products at premium prices or with diminished quality

Offer “smarter” solutions with no trade-off in quality and no social or green premium

Value capture

Focus on risk mitigation and improved efficiencies

Reach across all seven levels of sustainable value creation

Value chain

Manage company’s own activities

Manage across the product or service life cycle value chain

Bolt-on vs Embedded Sustainability

(Laszlo and Zhexembayeva, 2011)

Bolt-on sustainability Embedded sustainability

Relationships

Leverage transactional relationship. Stakeholders such as customers, employees, and suppliers are resources to be managed and sources of input

Build transformative relationships. Co-develop solutions with all key stakeholders including NGOs and regulators to build system-level change

Competitor Operate only in win-lose mode in which any gain is competitor’s loss

Add cooperation with competitors as potential sources of gain

Organization Create a “scapegoat” department of sustainability

Make sustainability everyone’s job

Competencies

Focus on data analysis, planning, and project management skills

Add new competencies in design, inquiry, appreciation, and wholeness

Visibility Make green and social responsibility highly visible and try to manage the resulting scepticism and confusion

Make sustainability performance largely invisible but capable of aligning and motivating everyone

(Laszlo and Zhexembayeva, 2011)

Creating Sustainable Value

6 Business Context

3 Product

2 Process

1 Risk

7 R

ad

ical

Inn

ovati

on

CostLaszlo (2003; 2011)

1 + 7 Value Creation

Value Destructiono Short term viewo Profit trade-offso Did Wholefoods consider this?

Risk mitigationo “Fail to prepare, Prepare to fail”o Sourcingo Embedded ethicso Collaborations

Efficiencyo Environmental efficiencyo Sustainable Sourcingo The Upper Room and Streetlytes

1 + 7 Value Creation

Product differentiationo Organico Healtho Lifestyle

New Marketso Conscious consumer market (Scotland)o Higher disposable incomeo Allegro Coffee

Protecting and enhancing the Brando Risk mitigationo Good practices = good reputation

1 + 7 Value Creation

Raising industry standardso Food labellingo British and Scottish produceo Ethics and sustainability

Radical Innovationo Supply Chain innovationo Renewable energy o Lifestyle

Harts (2005) Natural-Resource-Based View

A theory of competitive advantage based upon the firm's relationship to the natural environment.

Firms resources operationalized via 3 interconnected strategic capabilities:

1. pollution prevention

2. product stewardship

3. sustainable development

Driven by the challenge of irreversible global environmental damage

Harts (2005) Natural-Resource-Based View

Believes both the firms internal capabilities and environmental factors are important in gaining competitive advantage. View derived from Andrews (1971) Chandler (1962) Hofer & Schendel (1978) Penrose (1959).

Believes a firm should be concerned with its future position. Taking from Hamel and Prahalad (1994) idea of "competing for the future".

Valuable and costly to copy resources of a firm are key to maintaining competitive advantage. The capabilities creating the advantage should be supported by resources that are not easily duplicated by competitors (Rumelt, 1984)

Challenges of the Natural EnvironmentClimate Change

U.S. Historical Climatology Network (USHCN) (2010)

Challenges of the Natural Environment

Co2 Emissions

NASA (2012)

Challenges of the Natural EnvironmentGrowth in Population

United Nations (2011) World Economic and Social Survey 2011

Challenges of the Natural EnvironmentGrowth in Energy Consumption

United Nations (2011) World Economic and Social Survey

Whole Food's CompetenciesStrategic capability

Core Competencies Competitive advantage

Pollution prevention

Encourages store to Purchase from local suppliers

Code of Conduct

Ethical image

Product stewardship

Stakeholder integration by Whole Foods

Offering enjoyable grocery shopping experience

Highly selective in products they sell: Natural and Certified Organic

Perishable foods 67% of sales

Sells Private Label organic food as lack of organic brands

Quality and Service

Appeals to above average income earner

Sustainable development

Organizational set-up: locating where the demand is

Team-based environments- independent decisions

Acquisition as a means of expansion

Shared vision

In the 100 best Corporate Citizens

Reputation as No.1 natural food chain

Sustainable Value

Unsustainable (Value

Transfer)

Sustainable Value

Unsustainable (Lose/lose)

Unsustainable (Value Transfer)

Shareholder Value

+

+ Stakeholder Value

(Laszlo and Zhexembayeva, 2011)

Shareholder Value

Investors

Stewardship

Profits

Stakeholder Value

Employees

Benefits

Shared Fate

Culture

Suppliers

Local Producer Loan

Programme

Rewards Farmers

Community

Donations to food banks

5% Days

Whole Planet

Customers

Service

Education

Quality

Environment

Can they do more?

Whole Foods Walmart

Do Whole Foods Markets embed sustainability?

YES

Core Principles

Sustainable Aims

Stakeholder Orientation

Conscious Environmental Awareness & Effort

“It is our dissatisfaction with the current reality, when compared with what is possible, that spurs us toward excellence and toward creating a better person, company, and world.” (Whole Foods Market, 2012)

Balancing Triple Bottom Line

Organic

Happy Famers

Biologically Viable

Health & Safety

Zero Pesticides

372 Miles

Travelled

Non-Organic

Mistreated Farmers

Wasted Land

Poor Health & Safety

68 Pesticides

Flush and Wax

11,552 Miles Travelled

Andrews, K. 1971. The concept of strategy. Homewood, IL: Irwin.

Brundtland Commission (1987), Our Common Future , United Nations World Commission on Environment and Development. Oxford: Oxford University Press.

The Brundtland Report, 1987. Report of the world commission on environment and development: Our common future.[Online] available at: http://www.undocuments. net/wced-ocf.htm (accessed: 1st March, 2015).

Chandler, A. 1962. Strategy and structure. Cambridge, MA: MIT Press.

Conscious Capitalism. (2015). An Introduction to Conscious Capitalism. [Online] Available: http://www.consciouscapitalism.org/node/3998. [Accessed: 9th Feb 2015]

Elkington, J. (1998). Enter the Triple Bottom Line. [Online] Available: http://kmhassociates.ca/resources/1/Triple%20Bottom%20Line%20a%20history%201961-2001.pdf [Accessed: 1st March 2015]

Hofer, C., & Schendel, D. 1978. Strategy formulation: Analytical concepts. St. Paul, MN: West.

Hubbard, D.W. (2010). How to measure anything: finding the value of intangibles in business. New York City: John Wiley & Sons.

Laszlo, C, Zhexembayeva, N. (2011) Embedded Sustainability: The Next Big Competitive Advantage. Sheffield: Greenleaf Publishing. P121

Levy, D. L. (1997). ‘Environmental management as political sustainability’, Organization & Environment, 10 (2), pp.126-147.

References

References

Mackey, J, Sisodia, R (2013). Conscious Capitalism: Liberating the Heroic Spirit of Business. Boston: Harvard Business Review Press. p 87, 137, 194, 217, 218, 241

Michaelis, K. (2015), ‘Your apples are a year old”, Journal of lifestyle and food, 6 (22), pp.56-63.

National Pesticide Information Centre (2015). http://npic.orst.edu/

Penrose, E. 1959. The theory of the growth of the firm. New York: Wiley.

Hamel. G.. & Prahalad. C. K. 1991. Corporate imagination and expeditionary marketing.

NASA (2012) Climate change: How do we know? [Online] Available at:http://climate.nasa.gov/evidence/ Accessed 15 February 2015

Rumelt. R. 1984. Toward a strategic theory of the firm. In R. Lamb (Ed.), Competitive strategic management: 556-570. Englewood Cliffs, N: Prentice Hall

The Scottish Government (2013), Obesity Indicators 2013. [Online] Available at: http://news.scotland.gov.uk/News/Obesity-Indicators-2013-69f.aspx (Accessed: 10th March 2015).

Whole Foods Market (2015). Whole Foods Market: Home. [Online] Available: http://wholefoodsmarkets.com [Accessed: 10th March 2015}

U.S. Historical Climatology Network (USHCN) (2010) [Online] Available a: http://www.forbes.com/sites/eriksherman/2014/07/15/the-latest-climate-change-denial-fact-twisting/ Accessed 15 February 2015

References

United Nations (2011) World Economic and Social Survey 2011 The Great Green Technological Transformation. Department of Economic and Social Affairs

Vaughan, D. (2011)” The importance of capabilities in the sustainability of information and communications technology programs: the case of remote Indigenous Australian communities”, Ethics and Information Technology, 13(2), pp131-150.

Wong, J. (2015), ‘Organic Apples: Does it really matter?”, Wake the Wolves. [online] Availbale at: http://wakethewolves.com/organic-apples-vs-regular-apples-does-it-really-matter/ (Accessed: 10th March 2015).